Year | Cash flows | Cumulative Cash flows |
0 | (5100) | (5100) |
1 | 1500 | (3600) |
2 | 2600 | (1000) |
3 | 1300 | 300 |
4 | 1000 | 1300 |
Payback period=Last period with a negative cumulative cash flow+(Absolute value of cumulative cash flows at that period/Cash flow after that period).
=2+(1000/1300)
=2.77 years(Approx).
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